criminal prosecutions

Abacus Bank Faces Criminal Charges for Liar Loans Yet Most Who Perpetuated the Financial Crisis Go Unpunished

dropinbucketOn May 31st, Manhattan prosecutors filed criminal charges against Abacus Federal Savings Bank and 19 employees. These are the first criminal charges against an actual bank associated with the financial crisis. This very small bank issued fraudulent mortgages, otherwise known as liar loans and sold them to Fannie Mae.

Abacus Federal Savings Bank, a small bank with a major presence in New York City’s Chinese community, and 19 of its former employees have been charged with inflating the qualifications of mortgage applicants to meet federal loan standards, a scheme that prosecutors say brought the bank tens of millions of dollars in ill-gotten fees and sent hundreds of millions of dollars in risky mortgages to the investment market.

The thing is liar loans were extremely common, so why would New York Prosecutors go after this small community bank instead of the larger fish? Politics and resources.

Bill Black in the below Bloomberg law interview says this prosecution will probably be our token sacrifice. In other words, don't expect Countrywide, notorious for liar loans and now part of Bank of America to be put in cuffs, doing the perp walk.

No Bank Prosecutions From Attorney General Who Used To Represent The Banks!

dojlogoWe all know there is no justice when it comes to criminal and even civil prosecutions for the financial crisis. We all know there is no justice when it comes to foreclosures. Are you aware the Obama administration is about to let the banks once again off the hook?

Maybe this has something to do with it. Reuters gives us just a little insight as to why their have been no criminal prosecutions of banks and civil penalties have been slaps on the wrist.

U.S. Attorney General Eric Holder and Lanny Breuer, head of the Justice Department's criminal division, were partners for years at a Washington law firm that represented a Who's Who of big banks and other companies at the center of alleged foreclosure fraud.

Great, so the highest prosecutor in the land had the Banksters as clients for years.

Holder and Breuer were partners at Covington, the firm's clients included the four largest U.S. banks - Bank of America, Citigroup, JP Morgan Chase and Wells Fargo & Co - as well as at least one other bank that is among the 10 largest mortgage servicers.

Reuters is really piecing together the implications with this paragraph. Wow!

There is No Justice When It Comes to the Banks

There is no Justice. Countrywide financial settled a civil action by the Department of Justice for $335 million. This equates to $1,675 dollars in compensation for each of the 200,000 listed victims. Meanwhile Hispanics and Blacks were pushed into sub-prime loans which drove the housing bubble, prices, through the roof. Many lost their homes in foreclosure due to bubble payments and high interest rates, when a regular mortgage payment might have been financially feasible.

 

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